Indian and Pakistani officials held extensive talks Tuesday on terrorism and Kashmir — the two key issues that have fueled decades of hostility between the two nuclear-armed South Asian neighbors.

Indian Foreign Secretary Shiv Shanker Menon and his Pakistani counterpart, Riaz Mohammed Khan, reviewed the gamut of India-Pakistan relations, including a slew of confidence building steps that the two rivals have taken since they began their dialogue nearly three years ago, an Indian official said.

"The talks reviewed the composite dialogue process, Kashmir, and examined ways to implement a proposed anti-terror mechanism that the two countries have agreed to set up," Navtej Sarna, spokesman of India's External Affairs Ministry, said following the first day of talks.

Tuesday's interaction marked the resumption of peace talks that India suspended after bombs ripped through Mumbai's commuter rail network in July, killing more than 200 people. New Delhi blamed the deadly attack on the Pakistan intelligence service and a Pakistan-based militant group — allegations Islamabad denies.

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Two months later, Indian Prime Minister Manmohan Singh and Pakistani President Gen. Pervez Musharraf decided to resume the talks when they met in Havana, Cuba on the sidelines of the Nonaligned Movement Summit in September.

The key to the resumption of the process was a deal by the leaders to create what they described as an anti-terrorism mechanism that would help them work together to stop terrorists.

India has been pushing for joint efforts to fight terror in the hopes that involving Pakistani security agencies and providing them with evidence of the involvement of Pakistan-based militant groups would encourage the authorities in Islamabad to act against terror cells.

Pranab Mukherjee, India's external affairs minister, who met Khan and other Pakistani officials later Tuesday, emphasized the importance of India and Pakistan joining hands in the fight against terrorism, Sarna said.

India and Pakistan have a history of hostile relations, and have fought three wars since the partition of the subcontinent on independence from Britain in 1947, two of them over their competing claims to the divided Himalayan region of Kashmir.

India accuses Pakistan of funding and training the separatist rebels who cross over to the Indian portion of Kashmir and carry out terror strikes. Pakistan denies the charges, saying it only offers the rebels moral and diplomatic support.

While ending terror attacks remains India's prime concern, Pakistan, meanwhile, is eager to discuss concessions on divided Kashmir, which is predominantly Muslim and lies at the heart of the rivalry between largely Hindu India and Muslim Pakistan.

Although no major breakthrough is expected at the end of the two-day talks, Indian officials were optimistic that the resumption of the peace dialogue was itself a positive step that would help create a conducive atmosphere required for a negotiated settlement of some of the deep differences dividing the rivals.

"The achievements of the dialogue have been considerable. And the change in atmosphere was evident after last year's earthquake" where the two countries cooperated in relief efforts, said Sarna.